Franc Weakens as Negative Data Reinforces Case for Stimulus

The Swiss franc fell against the euro and erased its previous gains versus the US dollar today as the stagnating economy and falling retail sales contributed to speculations that the Swiss central bank will ease its monetary policy further during this month’s policy meeting.

Switzerland’s economy showed no growth in the third quarter of this year while economists had expected the same 0.2 percent rate of increase as in the previous three months. Retail sales dropped 0.8 percent in October instead of rising 0.4 percent as had been predicted by analysts. All the reports fed the outlook that the Swiss National Bank will cut its interest rates even deeper into the negative territory during the meeting on December 10.

USD/CHF traded at 1.0284 as of 11:37 GMT today after falling from 1.0289 to 1.0257 earlier. EUR/CHF advanced from 1.0867 to 1.0896.

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